Atmospheric Sciences & Global Change Division Research Highlights

February 2009

Trading Waste Heat for Energy in China

Combined heat and power can make the world's most populous country more energy efficient, cleaner

Results: An energy-efficiency approach that converts waste heat into power can help make China's energy future brighter, a study led by Pacific Northwest National Laboratory found. With the appropriate economic incentives and policies, the system known as combined heat and power (CHP) can be more widely adopted in China, significantly increasing energy efficiency and curtailing carbon dioxide emissions from coal-based power. The research also is helping Chinese officials educate stakeholders on the benefits of CHP and eliminate barriers to facilitate wider adoption of the technology.

CHP is a clean and reliable integrated energy system that captures waste heat from a fuel or energy source such as coal or natural gas. Then it delivers electricity or heat for nearby industrial processes, district heating and cooling systems, and residential and commercial buildings. A standard coal-fueled power plant converts only about a third of the fuel's potential energy into usable energy. But CHP systems convert as much as 90 percent, with lower losses from electricity transmission and distribution because the systems are near the points of use.

China already produces more than 13 percent of its electricity with CHP and is working to improve that. The research team made five recommendations that it believes will lead to even greater increases in energy efficiency. The recommendations include creating more consistent and predictable access to power and heat markets, pricing heat and power separately to accelerate adoption of CHP, including energy efficiency and environmental benefits in market valuations of CHP, streamlining financial incentives and approvals for CHP, and ensuring access to CHP financing for smaller industrial enterprises.

"Since the team's research report was published, China has continued to install more CHP systems," said PNNL's Dr. Meredydd Evans. "And a number of international banks have made new project-based CHP investments in China."

With China's growing energy demands, officials are looking for ways to more widely adopt combined heat and power systems for more efficient, cleaner energy use.

Why it Matters: The world's most populous country, China gets up to 70 percent of its energy from coal. China and the United States are the top two carbon dioxide emitters worldwide, with China expected to surpass the U.S. in the next few years. CHP has the potential to offset considerable amounts of greenhouse gases, up to 10 percent in 2030 worldwide, according to the International Energy Agency.

Methods: The team developed a baseline inventory of current CHP capacity and conducted an economic analysis of how policy reforms are affecting the adoption of CHP in China. The researchers analyzed trends and opportunities for industrial CHP and barriers to deployment. Based on the analysis of the Chinese situation, as well as insights on the United States' experience with CHP, the team made specific recommendations to facilitate CHP deployment in China.

What's Next: The Asia Pacific Partnership, the U.S. Environmental Protection Agency, and the International Energy Agency are using this research to facilitate the design, development, and/or operation of at least 500 megawatts of new CHP systems in China by 2010. PNNL and others will continue working with their Chinese counterparts to develop a CHP implementation plan for China.

Research team: Drs. Meredydd Evans and Shui Bin are researchers at the Joint Global Change Research Institute in College Park, Maryland, a partnership of PNNL and the University of Maryland. PNNL led the research in conjunction with Energy and Environmental Analysis, Inc., Energy Partners Corporation, and Eastern Research Group, Inc., for the U.S. Environmental Protection Agency.

Acknowledgments: The research was funded by the Environmental Protection Agency's Combined Heat and Power Partnership and was supported by the Asia Pacific Partnership on Clean Development and Climate, an international agreement to facilitate the deployment of clean energy technologies.